AUG. 29-30
Former high commissioner to Pakistan
CHUSHUL
On August 29, Indian special forces of a brigade strength occupied at least eight hills in the Chushul sub-sector. The hills, all within India’s perception of the LAC, were last manned by the army during the 1962 war. It has triggered an intense military confrontation with the PLA
Graphic by NILANJAN DAS
ARCTIC TENT Two-man highaltitude tent, protects inhabitants from wind and cold /
Text by SANDEEP UNNITHAN
SPACE HEATING DEVICE Multi-utility device used for warming tents and for cooking food. Solar- and batterypowered
THERMAL IMAGER
Camera designed for day/ night medium range observation. Electronicallyoperated optical and digital zoom and built-in video and image recording capabilities. Range up to 5 km. Incorporates GPS, laser ranger-finder and compass
SLEEPING BAGS Double-layered. Usable in -50 degree temperatures and wind velocities of 40 kmph
began their slow climb up the rolling hills south of Pangong lake. Chosen for their mountaineering skills, their backpacks stuffed with water and dry rations, carrying assault rifles and ammunition, radio sets, night vision devices and hand-held thermal imagers, they were up for the long haul. The climb took them between two and three hours, their objective being to occupy a series of rolling hills along a 40-kilometre-long massif south of the lake. The features— Thakung, Helmet Top, Black Top, Gurung Hill, Magar Hill, Mukhpari, Rezang La and Rechin La—are all at altitudes of 17,000 and 18,000 feet above sea level and within India’s perception of the LAC. Two of the features, Gurung and Magar, named after Gurkha clans, were a reminder of the last soldiers to have held these heights during the 1962 war. Groups of commandos also climbed the heights north of Pangong lake. The only casualty in their stealthy nocturnal ascent was an SFF company leader, Nyima Tenzin, killed in an anti-personnel mine blast south of Pangong lake. Indian troops had laid the mine in 1962 to deter the Chinese. The special units bivouacked at the top, just as their comrades had done nearly half a century ago—by fashioning improvised rock shelters or sangars out of loose rocks.
As the special units flashed their coded mission accomplished signals back to base on August 30, a wave of relief spread through the 14 Corps headquarters in Leh headed by Lt Gen. Harinder Singh. The corps guards the entire 840-km LAC in Ladakh. For over four months since the PLA moved two divisions of troops and tanks along the LAC and carried out intrusions, the army had no cards to play. It had tried, unsuccessfully, to convince the PLA to honour the June 6 de-escalation agreement in over a dozen rounds of talks at the military level. The PLA refused to budge from Gogra Post and Finger 4 on Pangong Lake. Now, virtually overnight, the tables had turned. The operation using a brigade of special forces—over 3,000 commandos—was the largest deployment of special forces by the Indian Army.
This is the biggest pushback against the PLA since 1986, when Gen. K. Sundarji heli-lifted a brigade to confront intruding Chinese soldiers at Sumdorong Chu in Arunachal Pradesh, giving the government some heft on the negotiating table. An army statement on August 31 said it had ‘thwarted Chinese intentions to alter the ground situation by occupying strategic heights within the LAC in the Chushul subsector’. The stealth move attracted a flurry of statements from the Chinese embassy in New Delhi, the Chengdubased Western Theatre Command and the foreign ministry in Beijing. A Chinese spokesperson in Beijing called it a ‘flagrant provocation’, and accused India of ‘severely undermining China’s territorial sovereignty, breaching bilateral agreements and important consensus and damaging peace and tranquility at the border areas’. In short, exactly what the text of India’s statements had been in the past four months.
To describe the situation in
G. Parthasarathy
southern Ladakh as tense would be an understatement. The situation is on a knife edge, far more than it was after the June 15 incident at Galwan Valley where a deadly clash between the two forces left 20 Indian soldiers and an unspecified number of PLA men dead. A senior army official explains why the situation is precarious. Many units are deployed in isolated places where the army does not exercise centralised command and control. The Rules of Engagement (which decided how both sides respond to each other) changed after the Galwan Valley clash on June 15. “Earlier, we rarely carried weapons on patrols and it was a peaceful situation, but now both sides are heavily armed. If a threatening situation is created, our soldiers on the ground will use their wisdom…”, he says.
What the army left unsaid was its official term for this operation, a ‘quid pro quo’ or simply a ‘QPQ’ move, a riposte aimed at getting the other side to withdraw by capturing territory. In Chushul, this move could be used to get China to withdraw behind Finger 4 in Pangong Tso where it has intruded nearly eight kilometres, and from Gogra Post near the Galwan Valley where it has moved forward by two kilometres.
Yet, India’s gambit teeters on the edge of armed conflict because both sides have deployed close to 50,000 armed soldiers, backed by artillery and tanks, within shooting distance of each other. Photographs released by the Indian Army showing PLA troops armed with medieval Chinese polearms called guandaos—a staff with a machete-like blade attached—suggests what they are up against.
On September 7, the first bullets were fired along the LAC between India and China in 45 years. The Indian Army accused the PLA of firing in the air to intimidate its soldiers at Mukhpari. The last time shots were fired was on October 20, 1975, when the PLA ambushed an Assam Rifles patrol in Tulung La in Arunachal
Pradesh, killing four soldiers. Both sides have since observed the military confidence building measures (CBMs) they signed in November 1996 which include several articles governing the conduct of troops and forbidding the discharge of firearms.
Military analysts feel China could exercise a range of retaliatory options to hit back —from launching a military offensive to retake the heights to expanding the conflict by applying pressure in other areas along the 4,400-km-long LAC, including in Arunachal Pradesh (see box). All these options have the potential of sparking off a military skirmish. Lt Gen. H.S. Panag, former Northern Army Commander, though, believes the focus of the Chinese offensive is likely to be Chushul. “The Chinese are most likely to counter-attack at Black Top , Rechin La and Mukhpari. Our defences are still coming up at these places and they would want to get in at the earliest.”
Lt Gen. D.B. Shekatkar (retired), former Director General Military Operations, disagrees. “I don’t think the Chinese are in a position to launch even a local offensive in Ladakh. Except in Daulat Beg Oldie (the army’s northernmost post in Ladakh) and Galwan, we are on the heights. In mountain warfare, if you are in a dominating position, you have won the first round.”
The next two months will be critical for the Indian side. October and November are seen as the ‘campaign season’ in the Himalayas, the best months to launch offensives before the onset of winter blocks the mountain passes. This is the reason the PLA chose to launch their 1962 border offensive in Arunachal Pradesh and
Ladakh during these months.
A fresh round of talks is now expected at the military and diplomatic levels to resolve the deadlock. Foreign minister S. Jaishankar’s meeting with his Chinese counterpart Wang Yi in Moscow on September 10 was one such summit. A joint statement issued by the MEA noted that “the current situation in the border areas is not in the interest of either side” and that “border troops of both sides should continue their dialogue, quickly disengage, maintain proper distance and ease tensions”. The corps commanders from both sides are set to meet shortly.
G. Parthasarathy, the former high commissioner to Pakistan, cautions against expecting any breakthroughs in the talks. “China has taken us for
A WAY FORWARD?
Foreign minister S. Jaishankar had talks with his Chinese counterpart, Wang Yi, on the sidelines of the Shanghai Cooperation Organisation meeting in Moscow, Sept. 10 a ride since 1962; they said they will respect the LAC but have never defined or drawn it, using it each time to their advantage, as a pressure point. We wouldn’t play the same game with them, so they gained a bit at each stage.”
One of the key tenets of mountain warfare is the control of strategic heights and passes. The US Army’s manual of mountain warfare defines heights as ‘key terrain’—terrain that is higher than that held by the enemy. Seizing the heights often depends on long and difficult envelopments or turning movements. No one knows this better than the Indian Army which fought the last century’s only high-altitude war in Kargil in 1999—sending up waves of infantry to dislodge the Pakistan Army from mountain tops.
From what it calls ‘LP/ OP posts’ (listening posts, observation posts) now manned by small groups of soldiers in sangars—the army can not only keep the enemy under constant watch but, in times of war, can accurately guide artillery shells on enemy positions. “The Chinese might have been preparing for a level 3 or 4 game, but we have taken the game to level 9,” says one senior army official. “We have handed them a fait accompli. If they stay, they are below us. If they launch an offensive, they are still below us.”
The view from the heights—as Brigadier N.C. Joshi (retired), who served two tenures in the Chushul, says, is ‘breathtaking’. “You see nothing but plains all the way into Tibet.” From their perch atop the heights, Indian soldiers can see the G219 Xinjiang-Tibet road and even the PLA’s Moldo garrison in the Spanggur gap—a two-kilometre-wide valley in the mountains. An army official says the occupation of the passes bottlenecks the Chinese: “We have increased the cost for them to take back the area.”
The plans to dominate these heights, according to two sources, always existed with the army, just that the political will to implement them was never there. The army began looking for a military option over the past month when it was clear that talks with the Chinese were not making any headway and they had refused to restore the status quo ante as it existed along the border on April 2020.
The choice of Chushul was not accidental. History, geography and geopolitics intersect at Chushul—a military gateway between Ladakh and Tibet. Exactly to whose advantage is decided by the side that can apply the quantum of military force needed to move through its mountain passes. In 1841, it was Zorawar Singh, a general of the Dogra ruler of Jammu, Gulab Singh, and conqueror of Ladakh and Baltistan, who chose the Chushul doorway to ascend the Tibetan plateau where he died in battle with the Chinese and Tibetan armies. In 1842, the Dogras and the Tibetans signed the treaty of Chushul, demarcating the border between Ladakh and Tibet.
In October 1962, the PLA burst through the Spanggur Gap overwhelming a lightly-held Indian garrison. The
PLA advance saw the Indian Army airlifting six AMX-13 light tanks—the world’s highest tank deployment—to defend the access to Leh. A company of 120 entrenched Indian soldiers fought a ferocious rearguard action falling to the last man to protect an airfield against the advancing PLA. The saddle where they made their last stand against the advancing Chinese—Rezang La—is synonymous with near-suicidal courage. The Chinese declared a ceasefire just two days later and withdrew. The Indian Army too pulled back from the area, never to return except for occasional patrols. “Both us and the Chinese claimed it but never occupied it—it was for all practical purposes a no man’s land,” says Brigadier Joshi (retired).
While the danger of the Chinese returning to reclaim the heights and plunging the region into a military conflict remains, the Indian Army is focused on reinforcing its positions—guarded with barbed wire— and protecting its soldiers from the elements with high-altitude clothing and temporary shelters. A logistics line, all of it relying on porters and soldiers transporting material on foot, will ensure the posts are stocked with food, water, fuel oil for cooking and heating and batteries to power their electronics.
At these super-high altitudes, the enemy could not just be a sneak attack from Chinese soldiers but frostbite, sunburn, high altitude sickness and pulmonary oedema. Winter brings with it snow blizzards—where fine powder-like snow can kill humans by rapidly filling up nostrils and freezing winds can plunge the mercury to as low as 40 below zero. The army, fortunately, has the valuable experience from Siachen and manning the winter posts in the Kargil sector to fall back on. “Wars are fought on capabilities and not wishlists, and these capabilities are what the army has invested in for decades at the cost of lives and comfort,” says Lt Gen. P. Ravi Shankar, former Director General Artillery. In Chushul lies the key to the escalation of a four-month-long military stand-off or its eventual resolution. ■
BY ROMITA DATTA
A
experience of organising rallies,” says a veteran TMC leader. It was Suvendu Adhikari, then president of the TMC youth wing, who was at the forefront of the Nandigram agitation and instrumental in loosening the stranglehold of the Left in some rural districts of the state. It was to rein in Adhikari, reportedly on the advice of her then confidant Mukul Roy, that Mamata floated a new youth organisation, the Trinamool Yuva, in 2011, and made Abhishek its president.
Abhishek ran Trinamool Yuva as a corporate outfit. Membership was given for Rs 30 and caps, T-shirts, banners and bandanas, with ‘Yuva’ inscribed on them, flooded the market. “The organisation gained visibility with hoardings and other paraphernalia. It made Rs 28 crore from membership, but [no real] impression in terms of political activity,” claims Arjun Singh, a former TMC member and now BJP MP from Barrackpore.
On February 24, 2012, Abhishek had a lavish wedding, organised by his in-laws, in New Delhi. Mamata, who was present in the national capital for a meeting with then prime minister Manmohan Singh, stayed away, perhaps to signal that it did not square with her simple lifestyle. But differences, if any, between Mamata and Abhishek didn’t spill into the open. The fact that Mamata is known to lean on Abhishek’s mother Lata for emotional succour may have played more than a bit role in managing these differences. The birth of Abhishek’s daughter Azaniah in July 2013 had Mamata mentioning in close circles that it was the rebirth of her mother Gayatri Devi, who had passed away in 2011. Mamata is known to be fond of seven-year-old Azaniah and often gets her home.
In 2014, when the Diamond Harbour Lok Sabha constituency in South 24 Parganas district fell vacant after
TAKING CENTRESTAGE Abhishek Banerjee with aunt Mamata Banerjee and Kolkata mayor Firhad Hakim (right) at a Lok Sabha poll meeting in Kolkata, May 2019 incumbent Somen Mitra resigned over differences with the TMC leadership, party seniors, such as Subrata Bakshi and Partha Chatterjee, urged Abhishek to contest from the seat in the upcoming general election. The redoubtable party machinery—led by Sovon Chatterjee, who had a strong base in South 24 Parganas—put its weight behind him to ensure that he won. Abhishek defeated Abul Hasnat Khan of the CPI(M) to become, at age 26, the youngest parliamentarian at the time. The same year, within the TMC, he started sidelining Adhikari, replacing him as the party’s youth president with then close aide Saumitra Khan and, within months, taking charge himself.
Next came the friction with Mukul Roy. Abhishek is widely thought to have hastened the exit of the man whose own ambitions and influence with Mamata may have impeded the Yuvaraj’s ascent. Soon enough, there were differences with Sovon Chatterjee
too, over control of party resources and area domination.
Roy joined the BJP in 2017 and Chatterjee followed suit two years later. Both blamed their exit on Mamata’s dynastic politics. If Mamata had reservations about their departure, she did not make them public. But it paved the way for Abhishek’s unassailable hold over the party. Simultaneously, it sent a message to others contemplating a rebellion: fall in line or leave. Differences over portfolio distribution after the 2016 assembly election victory— which even saw hoardings and posters in Kolkata declaring Abhishek as the ‘real match-winner’—were brushed under the carpet, lest it encourage factionalism and give rise to parallel power centres, as had happened with Roy. Didi bought peace with Abhishek and rarely expressed her reservations after he met with a major accident in October 2016 while returning from a rally in Murshidabad.
As Abhishek’s clout grew over the years, the allegations, both in the party and outside it, of a culture of extortion—often for the favour of winking at sundry unlawful activities such as cattle smuggling or illegal sand/ coal mining or quarrying—reached a new high.
Never shy of living it up, Abhishek rides in big SUVs, lives in a grand house in Kolkata’s Bhowanipore—in stark contrast to his aunt’s humble house not so far away—with a posse of Black Cat commandos and cars. Every year, Abhishek organises a youth festival in his constituency to promote football, cricket and other sports. “Abhishek brings in celebrities like Yo Yo Honey Singh or a Russian ballet troupe. He spends Rs 15-20 crore a year on such events,” claims a TMC member from South 24 Parganas.
It is widely believed within the TMC that Abhishek could not have reached where he has without Mamata’s blessings. “He did not have to struggle to get anything,” says a Bengal cabinet minister, not wishing to be named. “Initially, these (positions and power) came to him from the party supremo, and later, at his own bidding—even the supremo was not kept in the loop.”
So far, Mamata has eschewed any talk of a political heir. “The people of Bengal are my family,” she says. “I have not made any political will. I am creating five generations of leaders who’ll take the party forward even when I’m not there.” But the writing is on the wall.
The ground TMC ceded to the BJP in the 2019 Lok Sabha election appears to have left Mamata shaky. This is perhaps why she agreed to Abhishek’s suggestion to rope in Kishor, even though his recommendation of a massive overhaul of the party and re-engineering of Mamata’s image are causing much anguish within the TMC. “It is sad to see her (Mamata) reading out speeches that he (Kishor) has scripted, making sweeping changes in the party structure by inducting Abhishek loyalists and defanging those who are leaders in their own right and enjoy mass support,” says another minister. “The recent rejig in the party was done to sideline leaders who were a threat to Abhishek’s authority. The first one to be divested of all prominent positions and responsibilities was Suvendu Adhikari, followed by Rajib Banerjee.”
Seniors and politically experienced leaders have been removed as TMC district observers. Instead, each district will be run by a team of chairman, district president and a coordinator, in consultation with a seven-member steering committee, which again will have Abhishek as the fulcrum. “We would have said nothing had he brought in people who performed. Shyamal Santra, the youth president of Bankura, who had been rejected by people in the 2019 Lok Sabha election, has been brought back to lead the party. Paschim Burdwan had gone to a youth president who has little political skill but great ability to generate money from illegal coal mines,” says a TMC leader from Paschim Burdwan.
According to a minister in Abhishek’s inner circle, the attempts to clip Adhikari’s wings are deliberate: “He (Abhishek) is doing it because he knows Suvendu is going to jump ship. The idea is to minimise the party’s dependence on him.” But it’s not just Adhikari who is being sidelined. Leaders and workers who’ve been with the TMC from its inception are allegedly being attacked by Abhishek’s aggres
LEADER IN WAITING Abhishek Banerjee addresses a gathering during a Trinamool Congress roadshow in Bankura, April 2019
sive youth brigade, who have become a parallel power centre. A violent turf war is playing out between the party’s youth and parent organisations in districts such as South 24 Parganas, Cooch Behar, Alipurduar and Murshidabad, with more than a hundred political workers losing their lives. All Mamata has done is make token statements about seniors deserving their place in the party as much as the youth.
While leaving the TMC, Roy had alleged that the party was being run like a private company of the “Banerjees”. Unlike the Left parties, especially the CPI(M), where committee members are democratically elected at an interval of three years, posts and portfolios in the TMC are distributed as perks, on the whims and fancies of the top leadership. Subrata Mukherjee, a senior TMC leader and minister, was once heard remarking, “There’s only one post in the Trinamool. The rest are lamp-posts.”
Behind the ongoing rejig in the TMC, which includes appointing 23 spokespersons, a seven-member steering committee, a 21-member state coordination
committee and two dozen secretaries, are Kishor and Abhishek. The IPAC team is reported to have suggested new faces and reshuffling on the basis of a survey that maps leaders’ performance and popularity. “But in a one-man party like the TMC, the final say is with the supremo—and now with Abhishek ever since he won Mamata’s confidence,” says a veteran TMC leader, requesting anonymity.
Cabinet minister and party spokesperson Partha Chatterjee, who claims to have mentored Abhishek in his childhood days, says he has great potential, is a good orator and way ahead of the current crop. “But he needs to be down to earth and develop a temperament of working with all,” concedes Chatterjee. Rajya Sabha MP Sukhendu Sekhar Ray says Abhishek is a bright parliamentarian and his no-nonsense attitude and reserved nature are misread as arrogance and snobbery. Abhishek’s reticence, coupled with his tight security ring, contributes to his inaccessible image. Like Mamata, he has Z-plus security since 2015, after he was slapped at an East Midnapore rally by a youth leader. At Abhishek’s prodding, even Kishor has been accorded Z security cover.
The opposition has begun to identify Abhishek as the chink in Mamata’s armour, accusing him of extortion, and Didi of promoting dynastic politics. At a public rally in Kolkata in support of the National Register of Citizens and the Citizenship (Amendment) Act, Union home minister Amit Shah had openly said, “The next chief minister of Bengal will be a son of the soil, a leader who will rise from the masses and not the rajkumar (prince) of the Trinamool.”
Political observers believe by calling out aunt and nephew, Shah has thrown Mamata a big challenge. Abhishek is mired in controversies. People talk about his conspicuous wealth, arrogance, alleged terror politics and, above all, his disconnect with the masses and rural politics. “[Amit Shah] slipping in his name was a very clever way of asking the electorate if this was the kind of ruler they wanted,” says Kolkata-based poll analyst Biswanath Chakraborty. Already BJP leaders have begun saying that Mamata intends to project Abhishek as the next deputy chief minister. “The 2021 election will be about whether people want a dictator and her dynasty or democracy,” says Saumitra Khan, a BJP MP who broke away from the TMC in 2019.
Dissidents in the TMC have begun to liken Abhishek with North Korean dictator Kim Jong-un. “Some have already started reading similarities in their style of functioning, not to mention their physical resemblance,” says a party leader. The remarks have reached Yuvaraj too, who is sweating out the extra kilos on the treadmill. His image makeover also includes junking the kurta-pyjama for T-shirt and jeans. But when it comes to developing his aunt’s political acumen and mass connect, there is a lot of catching up to do.
SPECIAL REPORT
PRIVATE PUSH Tejas Express, India’s first privatelyoperated train, set for its maiden run from Lucknow to New Delhi, Oct. 4, 2019
ODecember towards the much-awaited corporatisation of Indian Railways. The Appointments Committee of the Cabinet formally reconstituted the Railway Board, the 165-year-old organisation’s apex decision-making body, appointing chairman Vinod Kumar Yadav as the board’s first CEO. The 114-year-old, eight-member board, which governs the public transporter, was replaced by a new one that has four members, with clearly defined roles of handling infrastructure, rolling stock, finance and operations. They are led by CEO Yadav, who will be responsible for human resources. Unlike the chairman, who was a first among equals, the board’s CEO has powers to overrule members and take decisions should consensus elude any matter.
The board’s new corporate structure is a critical part of reforms undertaken by the Piyush Goyalled railways ministry to make the Indian Railways a modern, efficient and profitable public mover. The restructuring is on the lines of railways’ peers in Europe and the US. Goyal’s other bold move of transforming the railways by infusing private capital is also being keenly watched. On July 1, his ministry invited requests for qualifications (RFQs) from investors to not just design, build, finance and operate private passenger trains but also to own them. Since the nationalisation of railways in 1951, passenger trains had been a government monopoly. In October 2019, as a pilot project, the railways allowed its subsidiary IRCTC (Indian Railway Catering and Tourism Corporation) to own the Tejas Express train and have private operators run it on the New Delhi-Lucknow route. But the concept achieved limited success. Now, the proposal for passenger trains both operated and owned by private players promises to be a game-changer.
Towards this, top railways officials held their second round of virtual meetings with the prospective investors on August 13. According to the RFQ document, 151 private passenger trains are planned on 109 routes (slotted into 12 clusters) across the country. Investors will have market freedom to not only set fares but also generate additional revenue from, say, letting out space for advertisements. If all goes according to plan, the first batch of 12 private trains is expected to start running by March 2023, and by end-2027, all 151 trains will be on the tracks. The operators, who will be selected through a bidding process, will be allowed to run trains—with a minimum of 16 coaches—for a period of 35 years. The private trains will give direct competition to the 2,800 express and mail trains run by the railways.
The move couldn’t have come at a more critical juncture. Indian Railways, the world’s fourthlargest rail network that runs 13,523 trains and ferries over 23 million people every day, is severely cash-strapped. Passenger business is a loss-making vertical for the railways. On average, the railways meets about 57 per cent of its operational costs through the sale of passenger tickets. The rest is cross-subsidised through earnings from freight. Last year, the government said the railways would need Rs 50 lakh crore over the next decade to upgrade its creaking infrastructure.
The staggering sum is double the government’s total expenditure across all sectors at present and cannot be sourced from the exchequer alone—private capital is desperately needed. Indian Railways is showing considerable flexibility to attract this investment, which will open up capital for infrastructure upgrades and running more passenger trains. After the first round of pre-application meetings with the prospective investors on July 21, it eased the norms in the bid document to allow operators to lease trains instead of a mandatory purchase of locomotives and coaches, removed the cap on bidding in a maximum of three clusters and also rationalised fee structures.
THE PRIVATE TRAINS PLAN
It has been a promising start, with the August 13 meeting attracting 23 companies. Among them are French major Alstom’s India arm, Spanish player CAF, Canadian coach-builder Bombardier Transportation, Bharat Forge, GMR Infrastructure, L&T Infrastructure Development Projects, Bharat Heavy Electricals Limited, BEML and IRCTC.
Four of the 12 clusters will be based in Mumbai
➘ The railways intends to start 151 private passenger trains on 109 routes
➘ Operators will have the freedom to fix fares and buy or lease rolling stock
➘ September 8, 2020 is the last date for submitting requests for qualifications (RFQs); bids are expected in November
➘ The first batch of 12 private rains is expected to run by March 2023
➘ Private freight trains will be allowed in the future and will run on the upcoming dedicated freight corridors
➘ On September 3, 2020, the Union government implemented the restructuring of the Rail
entered with an investment of around Rs 6,000 crore. Data from the Association of Container Train Operators shows that as of August 2020, they had suffered accumulated losses of Rs 600 crore. Operators cite the doubling of haulage charges in the past 14 years as the main reason for losses. Haulage charges now make up 60-70 per cent of their operating costs.
“Such factors (what happened with freight operators) create doubts in the minds of private players keen on investing in the passenger train segment,” says Rajaji Meshram, a partner at EY. For instance, operators want clarity on haulage charges. For private passenger trains, the railways fixed haulage charges at Rs 52.31 per train km for 2019-20, with inflation indexed. Investors are also concerned that revenues from passenger trains will depend on the allotted time slots, route congestion and the value-added features they can provide.
Yadav says that bid documents are being fine-tuned as per consultations with the stakeholders. But it is not clear how transparency would be ensured in the allotment of running slots. At present, trains run on an annual time-table. “In case of disputes, how will things be resolved?” asks a CEO, emphasising that time slots are key to traffic and revenue projections.
Bharat Salhotra, former MD of Alstom’s India and South Asia businesses, says things may remain unpredictable till the time a rail regulator is set up. In April 2017, Prabhu secured the Union cabinet’s approval for setting up a regulator, the Rail Development Authority, to rationalise fares and freight tariff, protect customer interests and set performance benchmarks. The authority is yet to see the light of the day. “We would have figured out the regulator concept by the time private trains start in 2023,” assures Yadav.
The regulator’s role encompasses the politically contentious issue of rationalising passenger fares and freight charges. In 2012, then railways minister Dinesh Trivedi lost his job over a proposal to increase fares by two paise per km. Every year, the government massively cross-subsidies passenger fares. In the previous fiscal, the railways reported total revenues of Rs 1.43 lakh crore, of which only Rs 56,000 crore